Through judicial restructuring, the corporate crisis was successfully resolved. The company entered the judicial restructuring process in July 2017 and was successfully completed in December 2017. The four-source joint fund introduced by Baowu Group, as a pilot enterprise for state-owned capital investment, leverages the industry's leading “better understanding of steel” industry advantages, and cooperates with three partners from WL Ross, China-US Green Fund, and China Merchants Group with rich industry restructuring experience, global resource allocation capabilities and strong financial logistics resources to jointly establish China's first steel industry restructuring fund. The restructuring successfully resolved the huge debt crisis of 41.7 billion yuan and the existential crisis through market-based, rule-of-law, and specialized methods, reduced the company's balance ratio to 33%, and divested 11.18 billion yuan of inefficient and ineffective assets through judicial auctions, greatly consolidating the company's asset base. After the restructuring was completed, the total assets of Chongqing Iron and Steel fell from 36.4 billion yuan to 25.1 billion yuan, liabilities were about 8 billion yuan, and net assets were about 17 billion yuan. The new management team has formulated a complete set of strategic optimization plans tailored to the actual situation of Heavy Steel. In terms of sales, the company will stick to the regional market: deeply cultivate Chongqing, be based in Sichuan and Chongqing, and expand to the southwest. At the same time, product structure, production line configuration, and process flow are optimized, mismatches with advantageous markets are corrected, and differentiated advantages of product portfolios are sought in target regional markets. The company will take “full production, full sales, and low cost” as the core strategic goal and implement it in stages in the context of “recent hemostasis, medium term hematopoiesis, and long-term upgrading”. The company's main tasks in the near future are to quickly restore discontinued production lines, consolidate asset quality, and implement management changes; the medium-term plan is to transform and increase hot rolling production capacity, add production lines for electric furnaces and building materials products, transform old rods/lines, and gradually implement short-process transformation; the long-term goal is to achieve process upgrades and product upgrades, and seek regional integration. The company's first quarter results have begun to bear fruit. In the first quarter, the company overcame adverse effects such as railway suspension restrictions during the Spring Festival travel season and limited navigation capacity due to the maintenance of the Three Gorges Dam. The raw fuel supply was effectively guaranteed, and production tasks were fully completed. The company's iron, steel and steel production in the first quarter was 1,342,700 tons, 1,494,400 tons, and 1,419,400 tons, respectively. Sales of steel in the first quarter were 1,379,400 tons, up 133% year on year, a record high for the same period. At the same time, the company's main technical and economic indicators continued to improve, and core indicators of major processes, such as the fuel ratio and utilization coefficient of blast furnaces in the ironmaking process, reached the best level in history since the relocation and construction of the plant. Among them, the average comprehensive energy consumption of tons of steel was 516.55 kgce/t, breaking the best level in history for three consecutive months. Through internal excavation in the first quarter, the overall cost reduction was about 256 million yuan. Corresponding to this, the company achieved operating income of 5.152 billion yuan in the first quarter, an increase of 211.3% over the previous year; total profit of 351 million yuan, compared with the huge loss of 595 million yuan in the same period last year, sharply turned a loss into a profit, reaching the best level in the history of Chongqing Steel for the same period. The company is actively promoting changes in the incentive system. In March 2018, the board of directors of the company reviewed and approved the “2018-2020 Employee Stock Ownership Plan (Draft)”. The plan will implement a combination of performance incentives and equity incentives, collaborate with the interests of the management team, core personnel and shareholders, truly achieve common development between employees and enterprises, and promote the long-term stable development of the company and the enhancement of shareholder value. The company is striving to become the most competitive steel company in southwest China. The company plans to reach 6 million tons of production this year and achieve an annual production of 8.3 million tons of steel and 7.9 million tons of steel by 2020. In terms of product structure, by 2020, the production of hot-rolled sheets, bars and wires, and medium and heavy plates will account for 40%, 40%, and 20%, respectively. Conduct benchmarking and exploration to ensure that indicators such as energy consumption and material consumption enter the advanced level of the domestic industry, and that product costs reach above the average level of the domestic industry. The company's earnings per share for 18-19 are estimated to be 0.13 yuan and 0.18 yuan, respectively. Give an increase in holdings rating. Risk warning: market risk, environmental risk